State lawmakers vet Lottery privatization proposal.

The senior executives of the British-based company poised to take over the
day-to-day management of the
Pennsylvania Lottery say they have a simple plan to
get more people playing to scratch-off and numbers games that underwrite
services for the state’s growing over-60 population.

“We’re treating the Lottery as a consumer good. We want to get a lot of
people playing a little instead of a few people playing a lot,” Alex Kovach, the
president of Camelot PA LLC and managing director of Camelot Global Services,
said Monday as a legislative oversight committee got its first crack at the
Corbett administration’s plan to farm out the $3.5 billion Lottery.

“We will take the Lottery here from good to great,” said Kovach, whose parent
company, Camelot Global, operates the National Lottery in the United Kingdom.
But he’ll have his work cut out for him.

Lawmakers on both sides of the aisle erupted last Friday with the Republican
administration’s after-business hours announcement that it had awarded a 20-year
private management contract to Camelot. The company claims it can wring as much
as $34 billion in profits from the 41-year-old Lottery over the lifetime of the
agreement.

The comments by Kovach and Dian Thomson, the Camelot Group’s CEO, marked the
company’s first appearance in a public forum since the administration revealed
late last year that the company was the sole bidder to manage the Lottery.

Members of the Senate Finance Committee peppered the executives, as well as a
trio of senior administration officials, with questions during a packed public
hearing, interrogating them on subjects ranging from the fate of the agency’s
230 employees to Camelot’s plan to boost profits by introducing keno and
Internet lottery sales to Pennsylvania consumers.

“The Lottery is not the Governor’s Lottery … it’s the people’s asset,” said
Sen. John Blake, D-Lackawanna, echoing the concerns of legislative Democrats
fuming over the administration’s assertion that it was legally allowed to bypass
the General Assembly to enter into the agreement with Camelot.

Pennsylvania Revenue Secretary Dan Meuser, one of the three officials to face
lawmakers Monday, came armed with the chapter and verse of state statute that he
said gave him the authority to sign the contract with Camelot. Meuser rejected
claims that the administration had moved unilaterally.

“What is being done is a legal process,” he said. “It’s a legal procurement
[of services]. Any such action we would take would be preceded by a legal review
process.”

Gov. Tom Corbett is expected to sign the contract as soon as the end of the
week. That would trigger a 30-day review period by incoming state Attorney
General Kathleen G. Kane. Once that review is complete, Camelot would begin a
one-year transition to take over management of the Lottery.

Council 13 of the American Federation of State, County and Municipal
Employees, which represents some of the Lottery’s employees offered a
counterproposal to manage the agency, but was rejected.

David Fillman, the union’s executive director, said he’d been told existing
Lottery employees were not guaranteed employment with the Camelot-managed
agency, but would be offered an opportunity to interview for their
positions.

The union is suing in state court to try to block the agreement, Fillman said
in an interview after his appearance before the Senate panel.

“This isn’t over for us,” he said.

The state’s proposed contract would require Camelot to keep as many as 170
employees and to maintain at least 80 percent of its business in Pennsylvania,
which would make it subject to state corporate taxes. The company has also set
up a subsidiary in Delaware.

Kovach told lawmakers that the company is committed to taking on as many
existing Lottery employees as it could. He also held out the possibility that
particularly capable employees would be offered promotions or opportunities to
work in the company’s offices in the United Kingdom.

During a briefing with reporters after the hearing, Peter Tartline, the
executive deputy secretary of the state Budgtet Office, said the contract calls
for a one-year transition period during which some employees would be retained
and others would not. Some employees could also be moved to other state
agencies.

The terms of Camelot’s proposed contract call for the company to meet annual
profit marks. Failure to meet those targets wouild resulr in the company not
being paid. And any shortfall would be made up by tapping roughly $200 million
in security the company is required to post as a part of its management
agreement.

Kovach and Thompson’s touted the company’s success in England, where 50
percent of the adult population a week plays the National Lottery and a
multi-country drawing known as EuroMillions. Despite a market saturated by
bookmakers and other forms of legalized gambling, the company said it posted
sales of $10 billion in fiscal 2012, with $4 billion in profits turned over to
the governor to fund “worthy causes” around the country.

Current Comments

Teddy Roosevelt spoke of the "malefactors of great wealth," and their opposition to regulation.

Did Republican voters elect a monarch of Pennsylvania, a nuanced king, who can singularly decide to outsource state governance?
Just like the over-reaching theocratic attempt to make women take invasive ultrasounds by enforcing his own religion on citizens of the state?

Republicans are wrong for Pennsylvania.

The lottery was one of the assets belonging to Pennsylvanian citizens. The move to sell it was clearly dictatorial. Look at the quick pace to ambitiously dispose of it. A deadline, no less.
And such dismissiveness of citizens disagreeing with privatizing *their* lottery.

So the lottery was outsourced.
Purloined assets.
And the "trust us--we know better" conservative Machiavellian end to benefit corporations...not people.

You were expected to be distracted by a lawsuit filed against the NCAA, and think of sports, rather than the theft of the state's lottery program.

Posted By: Mrs J | Jan 15, 2013 4:07:27 PM

Right, Camelot could face boycott from outraged Pennsylvanians which makes this even more risky because it could endanger existing Senior Benefits. They know they don't have public support but they push anyway because they are so misguided, vainglorious, avaricious and beholden to their Corporate masters. Also, the reckless and unilateral expansion of gaming will expose the taxpayers to legal bills and damages of a costly and well-founded lawsuit from AFSME 13 for this unlawful procurement contract. P.S. I bet they have to rush this because the state of the union isn't as bad as these bullsh-tters would have us believe. After all the Lotto numbers were better than Governor Morebett's yahoos expected and all that expensive to dump Hurricane Sandy Waste is going to PA.

Posted By: Silence Dogood | Jan 15, 2013 1:06:31 PM

I will never put another penny of my money in the Pa lottery as long as i live if it is run by someone out of the state or country

Posted By: The Democrat | Jan 14, 2013 4:37:34 PM

Leave A Comment

NOTE: Please express your opinions in a civil and respectful manner. Insensitive, inflammatory and derogatory comments will be removed at our discretion.